Trump Attacks CFPB To Pay Off Campaign Donors

Trump’s offensive against the Consumer Finance Protective Bureau (CFPB) is not really about libertarian small-government. Nor is it really aimed at cutting back excessive federal spending.

 The agency’s cost– which is only $750 million per year- does not have a meaningful impact on the federal budget.

The closing is mainly about large financial favors for Trump donors.

– The agency dropped its case against Capital One, after accusing the bank of illegally cheating customers out of more than $2 billion in interest payments.

– – It also dismissed a case against the student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA), accused of illegally collecting on student loans discharged in bankruptcy.

-The CFPB dropped a case against the Berkshire Hathaway-owned  Vanderbilt Mortgage and Finance, accused of steering borrowers toward unaffordable mortgages.

– It also dropped cases against Rocket Homes, which was charged with  illegal kickbacks in a mortgage scheme, and Heights Finance, accused of illegal “loan churning” to generate millions in fees and added costs.

All the owners of the above corporations donated massively to the Trump campaign.    

Other pro-Trump donors included:

– Elliott Management head Paul Singer – yes, the same repulsive Paul Singer who is a predatory investor in third-world debt –controls one lender with more than 5,000 consumer complaints. 

 -,Benjamin Horowitz  invested in a payday lending company called LendUp, which the CFPB slapped with tens of millions of dollars in fines for predatory lending practices. 

– Warren Stephens  held a major stake in another payday loan company– Integrity Advance — that was sued for predatory lending by the CFPB iand ordered to pay millions in fines.

Since opening its doors, the CFPB has directly obtained over $21 billion in relief  from companies that illegally cheated consumers. This includes more than $5 billion in relief for Americans with student debt, plus evidence that led to the U.S. Department of Education cancelling $188.8 billion of student debt for 5.3 million borrowers. 

 A CFPB measure to limit bank overdraft fees to $5, down from the typical $35 per transaction, would save 23 million households $5 billion annually. But that rule is now on the Congressional chopping block. 

Additionally, Congress must somehow protect CFPB’s measure to keep medical debt off the credit reports of the 15 million Americans burdened by unexpected medical expenses. This reform is hard to measure in dollars, but over the years it would produce massive benefits for all classes of Americans.

It is a tragedy that this form of debt relief will not occur for at least the rest of Trump’s term.